Ghost broker car insurance scams on the rise, investigators warn

Thousands of UK motorists could be driving without car insurance after falling victim to fraudsters known as ghost brokers

Emissions - clean air zones

Insurers are warning drivers to be vigilant when taking out car insurance policies, as the number of fraudulent ‘ghost brokers’ operating in the UK is on the rise.

Ghost brokers typically target people via adverts on social media and internet search engines, which appear to offer fully comprehensive car insurance policies at massively discounted rates.

How to stay protected from motor insurance scams

But the policies they offer will be fraudulent, with the brokers providing fake insurance via one of three methods. They will either simply forge a certificate of insurance; falsify the driver’s details to get cheap cover; or pay for a genuine policy using monthly repayments to obtain a certificate for the customer, before immediately cancelling the policy. Whichever method is used, the victim is left believing they are insured when they are not.

Insurance fraud investigators launched more than 2,300 new cases in 2019, the investigation revealed, with the police stating that victims lose an average of £1,209 in each incident. Consumers are advised to be suspicious of insurance quotes that are so cheap they seem too good to be true. 

Although the exact scale of the scam is not known, Britain’s largest insurer Aviva detected 3,100 car insurance applications with links to fake policies last year and is looking into a further 4,000 potential cases, according to an investigation by the Times.

Meanwhile, Direct Line says it has worked with social media firms and assisted in the closure of 500 fake insurance adverts in the last six months. The company’s head of motor insurance, Steve Barrett, commented: “Social media platforms are being targeted by these scam artists, and it is important we continue to work together to protect consumers from being misled into buying a worthless car insurance policy.”

He added: “Consumers need to be aware when responding to adverts and profiles that appear ‘too good to be true’ on social media, as they could find themselves a victim of fraud, losing money and potentially facing criminal charges.

“Whilst insurers are doing all they can to spot these fake accounts to protect honest policyholders, drivers may only find out they have been scammed when they come to make a claim or if pulled over for a random police check.”

Crash for cash - how to beat the insurance fraud scams

Consumers are advised to only buy insurance through reputable sources, such as an insurer’s website or a price comparison site.Those wishing to go through a broker should ensure the broker has both a landline telephone number and a physical address, and check any policies that are offered directly with the insurer before taking it out. 

Have you been a victim of a ghost broker? Let us know in the comments below...

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